The 4.2% plunge in U.S. oil prices Monday was the latest sign that the dynamics shaping the biggest commodity market have changed since the crude rally began.

Last year, two main forces propelled crude higher: an agreement by the Organization of the Petroleum Exporting Countries and its partners to trim production; and robust global growth that helped sop up excess supply from U.S. shale.

This year, investors are wrestling with an array of factors that can move the market: Trump administration sanctions that threaten to cut off Iranian oil from global supply; simmering U.S.-China trade tensions; OPEC’s decision to raise crude output; and dwindling production from Venezuela.

Additionally, President Donald Trump has been vocal about oil, tweeting on some days that prices are too high and that he is pressuring Saudi Arabia to increase production. Last week, The Wall Street Journal reported that U.S. officials are considering dipping into the country’s emergency oil reserves to prevent another sharp increase in prices.

Early Monday morning, oil prices declined in anticipation of Mr. Trump’s meeting with Russian leader Vladimir Putin. Prices fell steadily throughout the day, with some traders citing the potential for Russia to increase production beyond what it agreed to do last month with OPEC. But others said that speculation didn’t warrant such an extreme move. U.S. crude closed at $68.06 a barrel, its lowest price in more than three weeks.

“What you’re faced with is a market dealing with a lot of uncertainty,” said Michael Hans, chief investment officer of Clarfeld Financial Advisors. “It’s very difficult to have a clear understanding of what major producers are ultimately going to do.”

Crude remains one of this year’s best-performing assets after trade threats have roiled other markets: U.S. crude is up 13%, while Brent, the global benchmark, has climbed more than 7%.

But severe one-day plunges have become a regular fixture—a sign that while fundamental forces are still propping up oil for the most part, investors have become more inclined to sell, even on days when headlines aren’t necessarily bearish.

U.S. prices have struggled to surpass $75 a barrel and Brent can’t seem to top $80.

Monday’s tumble follows a 5% drop in U.S. benchmark oil last Wednesday, its biggest one-day loss in more than a year, which was largely triggered by investor jitters over higher supply from Libya. That day investors also ignored otherwise bullish news: The U.S. Energy Information Administration reported crude stockpiles dropped the most since September 2016 during the week ended July 6.

“I was struggling to see why the move was so extreme,” said Eric Armitage, chief executive of East Alpha, a quant trading firm. “Was the Libya news worth $5 [a barrel]? I don’t think so.”

The violent swings are leading many analysts and traders to say the market has become more vulnerable to speculators and algorithmic trading accelerating downturns.

One day before last Wednesday’s selloff, bullish bets by hedge funds and other speculative investors outnumbered bearish bets by about 24 to 1, near the highest the ratio has been all year, data from the Commodity Futures Trading Commission show.

“The market went way too far,” said Mark Waggoner, president of Excel Futures. “Getting out and taking profits is definitely the right thing to do.”

Selling accelerated on Monday as U.S. oil prices crashed through the 50-day moving average at about $69.50. Traders are now watching to see if prices test the 100-day moving average of roughly $67.

“You have technicals that are breaking down and you have fundamentals breaking down at the same time,” Mr. Waggoner said, noting that demand typically eases between mid-July and September.

According to Peter Hahn, co-founder of research firm Bridgeton Research Group, fundamental traders initiated the downward move on Wednesday. But those opening declines prompted trend algorithmic strategies to start selling.

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Energy traders said algorithms tend to be most active in the futures for the closest physical delivery, where the market is usually the most liquid and volatile. They said the extreme moves in the front-month contract on Wednesday were another sign of short-term fluctuations rather than a fundamental shift.

Still, bullish investors say recent declines could be a buying opportunity with U.S. sanctions against Iran and other disruptions potentially reigniting fears of a supply crunch. The U.S. has threatened to penalize countries that don’t cut oil imports from Iran to “zero” by Nov. 4.

“The supply issues have so much variability associated with them,” said Thomas Martin, senior portfolio manager at Atlanta-based Globalt Investments. “The oil market these days is acting on its own.”